Chip stocks

Chip stocks began 2026 with a strong rally, fueled by continued AI investment. ASML, Micron, Lam Research, Intel, and Marvell saw significant gains, building on impressive 2025 performances by AMD and Nvidia. This surge reflects the ongoing expansion of AI infrastructure by hyperscalers. Despite persistent investor enthusiasm, concerns about market valuations and potential overheating, highlighted by investor Michael Burry, remain. The VanEck Semiconductor ETF also extended its strong upward trend, indicating sustained industry momentum.

Despite Nvidia CEO Jensen Huang’s optimistic outlook on chip sales and AI’s potential, tech and AI stocks experienced a downturn this week. While Huang downplayed “AI bubble” concerns, the initial market boost quickly dissipated. Beyond Nvidia, Alphabet was the only Magnificent 7 stock to gain. Other chip stocks and AI-related companies like AMD, Micron, Oracle, and Palantir also faced significant declines, fueled by bubble concerns and scrutiny over AI investment returns. Investors are demanding demonstrable profitability for AI technologies.